Correlation Between Goldman Sachs and Banco BTG
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Banco BTG at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Goldman Sachs and Banco BTG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Goldman Sachs and Banco BTG Pactual, you can compare the effects of market volatilities on Goldman Sachs and Banco BTG and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Goldman Sachs with a short position of Banco BTG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Banco BTG.
Diversification Opportunities for Goldman Sachs and Banco BTG
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goldman and Banco is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding The Goldman Sachs and Banco BTG Pactual in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco BTG Pactual and Goldman Sachs is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on The Goldman Sachs are associated (or correlated) with Banco BTG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco BTG Pactual has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Banco BTG go up and down completely randomly.
Pair Corralation between Goldman Sachs and Banco BTG
Assuming the 90 days trading horizon The Goldman Sachs is expected to generate 0.86 times more return on investment than Banco BTG. However, The Goldman Sachs is 1.16 times less risky than Banco BTG. It trades about 0.08 of its potential returns per unit of risk. Banco BTG Pactual is currently generating about -0.28 per unit of risk. If you would invest 11,415 in The Goldman Sachs on September 25, 2024 and sell it today you would earn a total of 399.00 from holding The Goldman Sachs or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Goldman Sachs vs. Banco BTG Pactual
Performance |
| Timeline |
| Goldman Sachs |
| Banco BTG Pactual |
Goldman Sachs and Banco BTG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Banco BTG
The main advantage of trading using opposite Goldman Sachs and Banco BTG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Banco BTG can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Banco BTG will offset losses from the drop in Banco BTG's long position.| Goldman Sachs vs. The Charles Schwab | Goldman Sachs vs. Banco BTG Pactual | Goldman Sachs vs. Nomura Holdings | Goldman Sachs vs. Xp Inc |
| Banco BTG vs. The Charles Schwab | Banco BTG vs. The Goldman Sachs | Banco BTG vs. Nomura Holdings | Banco BTG vs. Xp Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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